China can turn to South America to replace US soybean imports, industry chief says
Comments by Cofco president Yu Xubo come as concerns grow that tariffs applied on US goods will inflate costs for farmers, raise retail prices
China can increase soybean imports from other countries to reduce its reliance on the United States, the boss of a state-owned grain trader said on Wednesday.
During its trade dispute with the US, which has seen the world’s two biggest economies impose new import tariffs on each other’s goods, China could increase its imports of soybeans from South American countries, Cofco president Yu Xubo said in an interview with the Communist Party’s official People’s Daily.
The country could also buy more rapeseed, sunflower seeds, and bring in more soybean meal, rapeseed meal, sunflower meal and fishmeal to fill any supply gaps. Increasing meat imports was also an option, he said.
The executive’s comments come as concerns are growing that hefty import tariffs applied by Beijing on American goods, including soybeans, will inflate costs for farmers and potentially increase retail prices of foods, like pork, the nation’s favourite meat.
Beijing imposed its tariffs on Friday in retaliation for US tariffs on Chinese goods. The trade dispute escalated on Tuesday after Washington said it would slap 10 per cent tariffs on an extra US$200 billion worth of Chinese imports.
“In the long term, South America and the Black Sea area still have great potential in their arable land, and can play a bigger role in the global soybean supply system,” Yu said.
As a leading grain trader in these regions, Cofco could help to meet domestic demand, he said.
The trade conflict between Beijing and Washington is already boosting grain and oilseed exports from the Black Sea region, where major sellers including Russia, Ukraine and Kazakhstan are looking to sell more corn, wheat and soybean to the huge Chinese market.
Soybeans, crushed to make cooking oil and the protein-rich animal feed ingredient soymeal, were the biggest US agriculture export to China last year at a value of US$12.3 billion, according to the US Department of Agriculture.
China, which imports 60 per cent of the soybeans traded worldwide, bought 32.9 million tonnes from the US last year, accounting for 34 per cent of the total purchases.
Rabobank said last week it reckoned China will have to buy 15 million tonnes of US beans with the new tariff this year because there are not enough alternative sources of beans from other major exporters, like Brazil and Argentina.